Granite Point Mortgage (GPMT) AI Stock Analysis

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Granite Point Mortgage

(NYSE:GPMT)

Rating:49Neutral

Price Target:―

Granite Point Mortgage faces significant financial headwinds, primarily due to declining revenues and net losses. The company has made strides in debt management and liquidity improvement, but persistent challenges with non-performing loans and credit loss provisions weigh heavily. Technical analysis suggests the stock is oversold, indicating potential for recovery, but caution is advised. Valuation metrics are mixed, reflecting both risk and potential value, while management's strategic focus on loan resolutions and share buybacks offers some optimism.

Positive Factors

Loan Portfolio Quality

Granite Point's portfolio is composed of 99% senior first mortgage loans and 97% of the loans have a floating interest rate.

Share Repurchase

Granite Point repurchased 1.2M shares of its common stock, which increased book value by $0.13 per share.

Negative Factors

Earnings Performance

Granite Point reported a GAAP loss of $0.86 per share and a distributable loss of $1.98 per share, which was below consensus and analyst estimates.

Loan Loss Reserves

GAAP earnings were negatively impacted by a $27.9M, or $0.55 per share, increase to CECL loan loss reserves.

Loan Write-offs

Distributable earnings were negatively impacted by $95.2M in write-offs related to the resolution of four 5-rated loans.

Granite Point Mortgage (GPMT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$114.72M

Dividend Yield8.44%

Average Volume (3M)480.06K

Price to Earnings (P/E)―

Beta (1Y)1.28

Revenue Growth-26.87%

EPS Growth-189.15%

CountryUS

Employees33

SectorReal Estate

Sector Strength62

IndustryREIT - Mortgage

Share Statistics

EPS (TTM)-0.57

Shares Outstanding48,405,860

10 Day Avg. Volume382,135

30 Day Avg. Volume480,058

Financial Highlights & Ratios

PEG Ratio-0.03

Price to Book (P/B)0.20

Price to Sales (P/S)0.00

P/FCF Ratio164.01

Enterprise Value/Market Cap7.79

Enterprise Value/Revenue3.30

Enterprise Value/Gross Profit23.73

Enterprise Value/Ebitda22.53

Forecast

1Y Price Target

$3.17

Price Target Upside33.19% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Granite Point Mortgage Business Overview & Revenue Model

Company DescriptionGranite Point Mortgage Trust Inc., a real estate investment trust, originates, invests in, and manages senior floating-rate commercial mortgage loans, and other debt and debt-like commercial real estate investments in the United States. The company provides intermediate-term bridge or transitional financing for various purposes, including acquisitions, recapitalizations, and refinancing, as well as a range of business plans, including lease-up, renovation, repositioning, and repurposing of the commercial property. As of December 31, 2021, its investment portfolio includes 105 commercial real estate loan investments. Granite Point Mortgage Trust Inc. was founded in 2015 and is headquartered in New York, New York.

How the Company Makes MoneyGranite Point Mortgage Trust Inc. generates revenue primarily through the interest income earned on its portfolio of commercial real estate loans. The company originates loans, typically senior floating rate loans, and earns interest over the life of the loan. GPMT also benefits from fees associated with loan origination and, occasionally, from the sale of loans or other real estate investments. By focusing on floating rate loans, GPMT seeks to position itself favorably in varying interest rate environments, which can impact its net interest income. The company's performance is influenced by factors such as prevailing interest rates, credit conditions in the commercial real estate market, and the overall economic environment.

Granite Point Mortgage Financial Statement Overview

Summary

Granite Point Mortgage is experiencing significant financial challenges, with declining revenues and widening net losses impacting profitability. Despite strong cost management reflected in a high gross margin, the overall pressure from high net losses and asset reduction is substantial. However, the elimination of total debt and strategic management of financing activities provide some positive offsets.

Income Statement

Neutral

Granite Point Mortgage's income statement reveals significant challenges. The company experienced a substantial decline in revenue from $266.5 million in 2023 to $185.6 million in 2024, a drop of approximately 30.4%. Net income also turned negative at -$221.5 million in 2024, down from -$63.2 million in 2023, negatively impacting net profit margins. Gross profit margin remained strong at approximately 89.5% in 2024, indicating efficient cost management despite revenue drops, but overall profitability remains under pressure due to high net losses.

Balance Sheet

Neutral

The balance sheet shows a decrease in total assets from $2.85 billion in 2023 to $2.12 billion in 2024, alongside a decline in stockholders' equity from $858.9 million to $619.1 million. The debt-to-equity ratio improved as total debt was cleared in 2024. However, the equity ratio decreased from 30.2% in 2023 to 29.3% in 2024, reflecting reduced financial stability. The company's ability to improve its debt position is a positive indicator, but overall equity and asset reduction signal caution.

Cash Flow

Neutral

Granite Point Mortgage demonstrated a significant improvement in cash flow metrics. Operating cash flow remains positive at $8.76 million in 2024, though significantly reduced from $52.1 million in 2023. Free cash flow followed a similar trend. Despite this decline, the company reduced its financing outflows substantially, which may support future liquidity. While cash flows were pressured, strategic management of financing activities provided some relief.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
37.67M	39.86M	266.49M	78.26M	87.53M	104.93M
	Gross Profit
37.67M	39.86M	255.20M	47.28M	57.44M	75.90M
	EBIT
0.00	0.00	121.89M	85.32M	68.55M	-39.85M
	EBITDA
0.00	0.00	0.00	70.82M	68.55M	-39.85M
	Net Income Common Stockholders
-139.94M	-207.05M	-63.20M	-40.83M	68.35M	-40.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	0.00	188.37M	3.48B	191.93M	261.42M
	Total Assets
2.72B	2.12B	2.85B	3.45B	3.99B	4.22B
	Total Debt
1.07B	875.09M	1.95B	1.41B	2.26B	1.53B
	Net Debt
919.40M	787.30M	887.33M	1.28B	2.07B	1.27B
	Total Liabilities
1.95B	1.50B	1.99B	2.47B	2.26B	1.53B
	Stockholders Equity
774.12M	619.09M	858.90M	983.54M	1.01B	933.85M
Cash Flow		Free Cash Flow
-1.68M	5.99M	52.10M	58.90M	60.30M	20.25M
	Operating Cash Flow
1.40M	8.76M	52.10M	58.90M	60.30M	20.25M
	Investing Cash Flow
498.23M	435.24M	561.43M	408.63M	139.77M	341.62M
	Financing Cash Flow
-567.22M	-528.74M	-554.47M	-531.66M	-324.97M	-192.44M

Granite Point Mortgage Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price2.38

Price Trends

50DMA

2.23

Positive

100DMA

2.52

Negative

200DMA

2.69

Negative

Market Momentum

MACD

0.09

Negative

RSI

58.17

Neutral

STOCH

67.60

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GPMT, the sentiment is Neutral. The current price of 2.38 is above the 20-day moving average (MA) of 2.15, above the 50-day MA of 2.23, and below the 200-day MA of 2.69, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 58.17 is Neutral, neither overbought nor oversold. The STOCH value of 67.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GPMT.

Granite Point Mortgage Risk Analysis

Granite Point Mortgage disclosed 72 risk factors in its most recent earnings report. Granite Point Mortgage reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 2 New Risks

Taking title to properties securing loan investments, including via foreclosure, can result in losses that harm our results of operations and financial condition. Q4, 2024

Insurance on the properties underlying or securing our investments may not cover all losses. Q4, 2024

Granite Point Mortgage Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LOAN	67 Neutral	$58.05M	10.58	12.70%	9.11%	-5.84%	-3.44%
Sector *	60 Neutral	$2.75B	10.29	0.33%	8508.22%	5.95%	-17.48%
ACR	57 Neutral	$133.02M	62.16	5.47%	―	-13.68%	-53.53%
LFT	56 Neutral	$131.86M	12.66	6.38%	13.06%	-10.98%	-35.75%
CHMI	50 Neutral	$102.11M	43.78	-2.83%	20.34%	0.33%	-37.48%
GPMT	49 Neutral	$114.72M	―	-20.41%	8.44%	-26.87%	-189.15%
SACH	47 Neutral	$43.53M	―	-20.80%	32.21%	-55.51%	-493.18%

* Real Estate Sector Average

Performance Comparison

GPMT

Granite Point Mortgage

2.37

-0.49

-17.13%

LOAN

Manhattan Bridge Capital

5.08

0.12

2.42%

ACR

ACRES Commercial Realty

17.99

5.18

40.44%

LFT

Lument Finance Trust

2.40

0.28

13.21%

CHMI

Cherry Hill Mortgage

2.98

-0.09

-2.93%

SACH

Sachem Capital

0.92

-1.85

-66.79%

Granite Point Mortgage Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 25.26%|

Next Earnings Date:Aug 11, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant progress in resolving high-risk loans and active loan repayments. There was a positive development in the share buyback program and improvement in loan portfolio yield. However, the company reported a GAAP net loss and a substantial distributable loss during the quarter. Market uncertainty and a decrease in book value were also key concerns.

Q1-2025 Updates

Positive Updates

Resolution of High-Risk Loans

Successfully resolved four risk-rated five loans, totaling approximately $229 million, reducing the number from seven to three.

Active Loan Repayments and Pay Downs

Achieved about $172 million in loan repayments, pay downs, and resolutions in Q1 2025.

Share Buyback Program

Repurchased approximately 900,000 common shares in Q1 2025 with $3.9 million shares remaining under the current authorization.

Loan Portfolio Yield Improvement

Realized loan portfolio yield increased to 6.8% in Q1 2025, excluding non-accrual loans, the yield was 8.5%.

Negative Updates

GAAP Net Loss

Reported a GAAP net loss of $10.6 million or negative $0.22 per basic common share for Q1 2025.

Distributable Loss

Recorded a distributable loss of $27.7 million or negative $0.57 per basic common share, including write-offs of $24.6 million.

Continued Market Uncertainty

Renewed uncertainty in commercial real estate due to tariff announcements and potential recession concerns.

Decrease in Book Value

Book value declined by about $0.23 per share from Q4 2024, primarily due to the GAAP net loss.

Company Guidance

During the Granite Point Mortgage Trust First Quarter 2025 Financial Results Conference Call, management provided guidance on several key metrics. The company successfully resolved four risk-rated five loans, reducing the count from seven to three, with the resolutions totaling about $229 million in unpaid principal balances. They reported a GAAP net loss of $10.6 million or negative $0.22 per share and a distributable loss of $27.7 million or negative $0.57 per share. The company's book value as of March 31 was $8.24 per share, a decline primarily due to the GAAP net loss, partially offset by accretive share buybacks that benefited book value by about $0.10 per share. The realized loan portfolio yield improved by 20 basis points to 6.8%, excluding non-accrual loans, which would have been 8.5%. Granite Point actively repurchased about 900,000 shares of their common stock, with approximately 3.9 million shares remaining under authorization. The company's CECL reserve decreased to $180 million or $3.72 per share, driven by write-offs related to resolved loans. They maintain a strong liquidity position with $86 million in unrestricted cash and a total leverage ratio of 2.2x. The company anticipates resuming new loan originations later in 2025 while continuing to focus on resolving non-accrual loans and maintaining higher liquidity.

Granite Point Mortgage Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Granite Point Mortgage Appoints New Board Members

Positive

Jan 15, 2025

Granite Point Mortgage Trust Inc. announced the appointment of Patrick Halter and Lazar Nikolic to its Board of Directors, effective January 15, 2025. Mr. Halter joins the Compensation Committee and Mr. Nikolic the Nominating and Corporate Governance Committee. This move is part of Granite Point’s strategy to enhance board expertise and navigate current market conditions, aiming to drive growth and shareholder value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.